Compulsory Patent Licensing in the Time of COVID-19: Views from the United States, Canada, and Europe
Author | Abbas Kassam, Matt Norwood, Ute Pfaller, Charles F. Hauff Jr., Jeffrey D. Morton |
Pages | 30-62 |
Published in Landslide® magazine, Volume 13, Number 2, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
30 LANDSLIDE n November/December 2020
By Abbas Kassam, Matt Norwood, Ute Pfaller,
Charles F. Hauff Jr., and Jeffrey D. Morton
Compulsory
Patent
Licensing
in the Time of
COVID-19
Views from the
United States, Canada,
and Europe
Image: Yulia Shaihudinova, GettyImages
Published in Landslide® magazine, Volume 13, Number 2, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
November/December 2020 n LANDSLIDE 31
Abbas Kassam is a lawyer at Ridout & Maybee LLP in Toronto, Canada,
where he focuses his practice on intellectual property litigation, licensing,
and privacy matters. He can be reached at akassam@ridoutmaybee.com.
Matt Norwood is a partner at Ridout & Maybee LLP in Toronto, Canada,
where his practice focuses on patent prosecution and intellectual property
litigation. He can be reached at mnorwood@ridoutmaybee.com.
Ute Pfaller is an attorney at law at Withers & Rogers LLP in Munich,
Germany, where she focuses on trademarks, licensing, and patent and
trademark litigation. She can be reached at upfaller@withersrogers.com.
Charles F. Hauff Jr. is a partner in Snell & Wilmer LLP’s Phoenix ofce,
where he concentrates on intellectual property counseling, prosecution,
litigation, and licensing. He can be reached at chauff@swlaw.com.
Jeffrey D. Morton is a partner in Snell & Wilmer LLP’s San Diego and
Phoenix ofces, where he serves as external intellectual property counsel
to companies around the world. He can be reached at jmorton@swlaw.com.
Published in Landslide® magazine, Volume 13, Number 2, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2020 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
T
he COVID-19 pandemic that has impacted
the world over the past half year has raised
a myriad of legal questions in all aspects
of our daily lives. The eventual develop-
ment of a suitable vaccine, which will
likely be the subject of patent protection in
the U.S. and abroad, has run into a theo-
retical conict with the possibility that the
supply of the vaccine might be unable to
keep up with the demand.
As a backdrop to this conict, the grant-
ing of a patent provides a patent owner with
the legal right to sue other parties from
making, using, selling, or importing the pat-
ented subject matter. Compulsory patent licensing is generally
understood to refer to situations where another entity—upon
meeting certain criteria—can nevertheless make, use, sell, or
import the patented subject matter without obtaining the patent
owner’s permission. Examples of conditions that may warrant
an award of a compulsory license include national emergency
or extreme urgency where the invention serves vital public
health needs, or where a patent owner has abused its economic
power in violation of antitrust laws. In the case of COVID-19
vaccines, there has been speculation about a potential role for
compulsory patent licensing if a vaccine is invented and pat-
ented but supply cannot keep up with demand. While there are
potentially many factors (e.g., supply chain disruption) that
could cause a vaccine supply shortfall, any patent rights per-
ceived to contribute to that shortfall would likely give rise to
interest in compulsory licensing.
This article reviews the current state of compulsory patent
licensing in three key patent jurisdictions: the United States,
Canada, and Europe, three jurisdictions that are signicantly
involved in the development of COVID-19 vaccines.
United States
Unlike the patent statutes of many other nations, U.S. patent
law does not include a general compulsory licensing provi-
sion. However, other domestic laws include provisions that
allow for compulsory licensing of patented inventions. For
example, the Atomic Energy Act,1 Clean Air Act,2 and Plant
Variety Protection Act3 provide for compulsory licensing.
However, these provisions rarely have been used.
Additionally, the Bayh-Dole Act4 offers the federal gov-
ernment a narrower set of rights, termed “march-in rights,” in
respect of federally funded inventions. March-in rights come
with several restrictions, including that the government may
only use such rights if the patented invention was developed
using federal funding. To date, no administration has made use
of the march-in rights afforded to it by the Bayh-Dole Act.
Compulsory licenses also exist in a nonlegislative context.
Under U.S. antitrust law, compulsory licenses occasionally have
been awarded as a remedy for antitrust violations. In the patent liti-
gation context, a court may decline to award an injunction in favor
of a prevailing patent owner during infringement litigation, an out-
come that is somewhat akin to the grant of a compulsory license.
Internationally, the U.S., like Canada and the countries
of Europe, is a signatory to the Paris Convention for the
Protection of Industrial Property (Paris Convention). The
Paris Convention provides that its member states have the
right to take legislative measures providing for the grant of
compulsory licenses to prevent the abuses which might result
from the exercise of the exclusive rights conferred by the
patent, for example, failure to work. In addition, the U.S. is
a signatory to the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS Agreement). Article 31
of the TRIPS Agreement restricts the issuance of compul-
sory licenses by requiring that the applicant must have made
efforts to obtain authorization from the patent owner on rea-
sonable commercial terms and conditions; the scope and
duration of the compulsory license is limited, nonexclusive,
and revocable; and the patent owner is adequately compen-
sated. Against the backdrop of these international agreements,
and as mentioned above, the U.S. federal patent law does not
provide for a general compulsory licensing scheme.
In a non-country-specic manner, several relevant initia-
tives have been launched to ght the COVID-19 pandemic. For
example, the “Open COVID Pledge” states: “It is a practical
and moral imperative that every tool we have at our disposal be
applied to develop and deploy technologies on a massive scale
without impediment. We therefore pledge to make our intel-
lectual property available free of charge for use in ending the
COVID-19 pandemic and minimizing the impact of the dis-
ease.”5 To make the pledge, individuals, companies, and other
organizations that hold intellectual property rights must pub-
licly commit to making their intellectual property assets freely
available to ght the pandemic, and implement the pledge via
a license falling within certain open license specications.6 An
open license provides royalty-free use.
Finally, with an added focus on global cooperation in the
race for a COVID-19 vaccine, efforts to enforce patents during
the current pandemic have given rise to negative public reac-
tion, which has signicantly impacted enforcement actions. For
example, Labrador Diagnostics brought suit against BioFire
Diagnostics and its parent company bioMérieux S.A., alleg-
ing that two patents acquired by Labrador were infringed by
bioMérieux’s launch of certain COVID-19 tests.7 Due to the
public outcry against the lawsuit, eight days after ling the
lawsuit, Labrador announced the grant of royalty-free licenses
to third parties to use its patented technologies for COVID-19
tests. As such, and in this instance, it was the negative public
outcry that effectively resulted in a compulsory patent license.
Canada
Canada has adopted a more direct federal response to the
COVID-19 pandemic as it relates to compulsory patent licens-
ing. In March 2020, the Canadian government passed the
COVID-19 Emergency Response Act (Bill C-13), which intro-
duced provisions to the Canadian Patent Act that expand the
government’s ability to procure patented inventions—including
medicines and medical devices—in response to the COVID-19
crisis. While Canada’s Patent Act already contemplated limited
compulsory licensing,8 the new provisions allow a time-limited
compulsory license of patent rights even where the patentee is
able to satisfy demand for its patented invention.9 However, the
authors suggest it is unlikely that the new provisions will be
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